Former Celsius CEO charged with fraud in latest DOJ crypto case
Alex Mashinsky, the former chief executive of Celsius Network Ltd., was accused by prosecutors of orchestrating a years-long scheme to mislead customers about the financial health of his failing crypto lender and manipulate cryptocurrency prices for his own profits.
The 57-year-old was arrested Thursday and charged with six counts, including wire fraud, a year to the day after Celsius filed for bankruptcy and declared a $1.19 billion deficit. The Securities and Exchange Commission, the Commodity Futures Trading Commission and the Federal Trade Commission also filed lawsuits against Mashinsky and the company.
Prosecutors alleged Celsius staff were forced to change rosy public comments Mashinsky made during his weekly question-and-answer sessions — “Ask Mashinsky Anything” — because the statements were “false and misleading.”
Celsius was one of several high-profile crypto firms that imploded last year. The company gained popularity by paying high interest rates on digital asset deposits. But following the collapse of the TerraUSD stablecoin and a downturn in the digital asset markets, the company was left with a giant hole in its balance sheet and was unable to meet an influx of customer withdrawals.
Celsius’s former chief revenue officer, Roni Cohen-Pavon, was also charged with four counts, including fraud. Federal prosecutors in Manhattan allege that from 2018 through June 2022, Mashinsky “orchestrated a scheme to defraud customers of Celsius Network LLC and its related entities,” according to the indictment unsealed Thursday.
Mashinky and Cohen-Pavon are also accused of manipulating the price of CEL, Celsius’s token, prompting customers to purchase it at inflated prices.
Mashinky’s lawyer didn’t immediately reply to
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